Law of Demand

Law #1 of demand...as increases, decreases

• price, demand

• supply, demand

• demand, supply

• price, supply

Law #2 of demand....as decreases, increases

• demand, price

• price, supply

• price, demand

• supply, demand

This illustrates the demand for product

• Supply curve

• Price curve

• Demand curve

• Price curve

The degree to which changes in price cause changes in demand.

• Market curve

• Demand curve

• Elasticity of price

• Elasticity of demand

If demand for a good is very sensitive to the changes in price, the demand is elastic.

• True

• False

The curve for an elastic good on a demand curve will be steep

• True

• False

The price of a good is $5 and consumers demand 600 units a week. The price gets raised to $7.50 and demand falls to 590 units a week. Would this good be considered elastic or inelastic.

• Elastic

• Inelastic

Inelastic goods market curve is typically steep.

• True

• False

Which of the following is NOT a factor affecting elasticity of a good?

• Hot new product/FOMO on product

• Availability of subsitutes

• Relative importance

• Necessities vs. luxuries

• Change over time

Demand curves are only accurate as long as there are no changes other than the price that could affect a consumer's decision

• True

• False